unless it makes new lows i think this is a launchpad to go higher. >> so you went long -- >> short puts. >> great week, jim. thanks so much. ty, have you a great weekend. >> you, too. in the ty knows where his bread is buttered category, i want to wish a happy birthday week to my father-in-law jim la marka on long island. he and his buddies at dunkin' donuts watch us every day. >> thank them for that and happy birthday. "street signs" begins right now. jobs number coming in better than expected but why were we expecting so little? we asked why we're creating even more jobs but yet they're lower pay? we'll also talk about what your paycheck may finally start to rise above. speaking of moving higher, can pot solve some of our financial woes?

the fiscal spliff will spark a debate ahead. guess whose portfolio is up 160% in ten years. he'll bring some his top picks. if had to buy one -- apple, google or microsoft, which would it be? we put it to the test. hello. our early jobs inspired pop in the markets has just been buried under that weak consumer confidence. of course the lack of fiscal deal. we want some progress on that front. the dow is nonetheless on pace for its third straight weekly ga gain, the first time in four months. straight down to the floor of the stock exchange. bob, tally the week up for us. >> we're up fractionally on the dow. dow had a pretty good week overall. higher priced names like ibm did well but the s&p is basically flat. we're in a holding pattern. this is the market when you get big moves on either side, big gainers here -- financials on the up side and industrials. materials had a rather ugly week.

tech large by because of apple but some sectors did pretty well. two breakouts this week that really turned around here. financials. the citigroup announcement sparked some interest here. most of the big financial names for the day. you'll see financials are on the up side again today. jpmorgan, morgan stanley, citigroup, bank of america an regents financial. all had great weeks overall. the other big turnaround, computer hardware. not talking about apple. apple's had a lousy week. down 9%. but look. a simply disastrous month or two forle dell and hewlett-packard. all tornado around nurned aroun. apple today, sitting right near the lows for the week. lost about $50. we started around $585 for apple at the beginning of this week. >> down nearly 10% this week. a rare day when we see all the other techs higher and not apple. before we dig in to jobs,

let's talk deal or lack thereof. john boehner today saying there is no progress on the fiscal cliff and that is slamming cnbc's own deal-o-meter. we are in the red, folks. eamon javers, when boehner comes out and says it is not a fr progress report because we have no progress, that's not a good thing. >> no news is bad news in the case of washington. we're watching this fiscal cliff thing so carefully. let me play the sound bite so you can see the dour expression on speaker boehner's face as he talked to reporters early this afternoon. >> this isn't a progress because there is no progress to report. when it comes to the fiscal cliff that's threatening our economy and threatening jobs, the white house has wasted another week. >> so we all also from nancy pelosi, the democratic leader in the house of representatives earlier today. she came before cameras also, no

news from her had as well. holding pattern here in washington. rhetoric is pretty heated on both sides. you heard boehner there saying the president has wasted a week here. but behind the scenes, aides did give us some indication they'll continue to talk through the weekend so i think what's going on here is you're seeing the public blast of ret lick but behind the scenes they are talking to each other. i think the talks are fair le well coordinated. you can tell that by how tightly the white house and boehner camp on the press side have coordinated their rollouts of what they've said about these talks. they're within minutes of each other, using the same language. that's an indication talks are sort of going along here. it is not an indication we will have a deal any time soon but there's no reason to give up hope just now, you guys. we won't. >> i think our "rise above" pins should be bigger. 146,000 jobs were added in november. there is consensus out there

that this is a good number. it was much higher than expectations. the problem is why were our expectations so low? let us bring in the chief economist for north america at b and b perrybaugh. julia, i went back. 56 times since january of 1997 -- 56 months we have added more than 200,000 jobs. now we're happy we get 146,000. what's happened to our expectations in america? >> well, keep in mind one of the reasons expectations were so low going into this one was hurricane sandy which everyone expected to be a temporary effect. that didn't material az somewhat mi mysteriously and the labor department indicated it had no impact on the number. you're right, this is not good enough. this is a treading water pace of jobs. it is more of the same. it's not particularly good in the quality of jobs being

created so net net i think it's okay but certainly not what we'd like to see. >> maybe, tom, it is not that we are a nation of pessimists. it is that we're a nation of realists. maybe sort of from a strk turl long point of view we just have to get used to this. >> that's a great point. 150,000 is not good enough depending on your expectations for growth. if you're looking for 1.5% to 2% growth you are probably in the sweet spot. but if you are looking for something more, looking for 2.5% to 3% growth you need much more job growth to see that outcome. but we're not there. we don't think we'll get there. there's still too many headwind facing the small business segment at this point. from our perspective over the course of the next year you're probably looking at about 150,000 jobs or so on average. >> when you say you don't think we're going to get there, what? ever? like in the next few years? what kind of time frame you

looking at? >> i would say in the next year for sure. a famous economist once said our ability to see beyond the next year is almost impossible. i tend to agree with that. in the next year, 150,000 jobs is where we think we are. one thing we keep coming back to is the utter lack of aggregate demand. two, if you consider the small business segment from that perspective, they keep saying they're struggling with the lack of sales. another big issue is government regulation. just focusing on lack of sales, if that's one of their key concerns, then they're probably right for this perspective. this is something that will take 6 to 12 months to work through. >> if i'm an a student and i get a b, that's bad. if i'm a c student and i get a b, that's good. we seem to become a c economy happy with a b or buy-minus jobs number. what happened to great expectations and why isn't anybody in congress talking about growth? >> well, because we've got a lot of other issues. they built the cliff and now they're trying to keep us from

going over it but it is all a sort of self-made crisis if you will from the policy perspective. i think tom is right, there is a lot of structural issues holding the u.s. back. there's still deleveraging on the household side. businesses are stuck in a cautious state and probably rightly so. it's going to be a grind getting to higher rates of growth. and that's -- getting the expectations right is actually a good thing. we were overly optimistic early in the recovery. it led to a lot of volatility and that volatility itself has eroded confidence. settling in to some stability is not necessarily a bad thing. getting our expectations right is probably a good thing. i'm a little more optimistic than tom. i think the turn in the housing market is a significant development and i think it's got legs. so i think, again, not to overstate the case, but if we've turned the corner in housing, you're going to see maybe some loosening in credit standards, maybe some improving consumer

optimism. but we need to get the fiscal cliff behind us and behind news a decent way. we actually need to see a productive resolution, functionality on the part of our government. maybe that's too much to expect but that would certainly i think unlock -- >> that's part of our problem. we don't have great expectations. we have low expectations. i want to repeat -- 56 times since january of '97 we've added more than 200,000 jobs in a month. now we're happy we get 146,000. thank you. >> underpromise and overdeliver. creating jobs is great, but we also need to create jobs that actually pay a solid wage and that has been a real problem. median household incomes remain relatively stagnant for the past decade and real wages are declining as prices rise. so, how do we create good jobs and get your paycheck up? let's bring in harley lipman, ceo and founder of genesis 10, an i.t. consulting and staffing firm. i want to attack this from a slightly different perspective because you're doing some great things here, creating jobs here

in the united states as opposed to sending them to other countries where in the past it may have been cheaper. even though you might be an employee, your wages aren't going up, at least you've got a job here. it's not going to china because they're becoming uncompetitive. >> exactly. i think a lot of companies are recognizing that the attraction is to do jobs here because it will be able to minimize their risk. there's a lot of concentration overseas particularly in india which historically has been the epicenter of all the i.t. jobs that have gone offshore. >> how much do you think this is going to start creating jobs back here in america. we see companies all the time onshoring as opposed to outsourcing. >> well, more and more and more they're bringing jobs back here. they are aware, if they're able to quantify all the hidden costs, all the indirect costs and they're able to see that it's actually more competitive to have people work here in the united states and in terms of cost, when you analyze all that, you really will see that it's

actually about the same or even slightly cheaper to do it here now. >> isn't that kind of -- it's good that we're creating jobs, but isn't that kind of sad in the united states we're saying it is cheaper to do business all-in this detroit than it is in mumbai? >> well, i think that we want america to have a competitive advantage. if you have the technology work being done here, you're going to get all the cool, nifty, sexy technology impact of that. that's going to help keep our advantage. but i think that if you look at it purely from a value perspective, when you look at it in terms of innovation, this country has it now. it used to be offshore may have made sense 10, 15 years ago when you could get it at a very low cost. but today with the world being more flat and hundreds of millions of people emerge in the middle class in china and india, this is the place to do it. >> that's great but to brian's point, at what stage do we start to see wage gains here in the

united states, more money in our pockets? >> well, it's happening now. companies are being able to shift jobs from higher cost cities to lower cost centers in the united states where there is a lot of talent. so more and more jobs are being created here. we know the example of general motors, among others. and it's going to help the economy. so this is a very favorable outcome. >> thank you very much for joining us today, harley. thanks for bringing these jobs back here. the other big issue in the job market -- the lack of skilled workers. it is actually becoming a big issue for builders. diana olick is on that story. diana, what happened to all the construction workers that were out of work a couple years ago? where did they go? >> reporter: well, about 2 million of them, believe it or not, left the workforce during the housing crash. this is residential and non-residential construction. because this crash has gone on for going on five years now, a lot of those workers were retrained in other careers and are actually not coming back to

home building. that's why the builders are saying they need skilled workers. skilled workers like these students here at the potomac job corps who are learning the trade quickly because there's finally demand for them. >> do you see a number of employers in this space doing the training for these people themselves? >> there are places. they've said that in just the past two weeks they have have had calls from builders around the d.c. area, northern virginia. we've spoken to builders in texas who say they're also looking for skilled workers. that demand is great for this program because they've got more than 70 sites around the country where they're training these workers. i'm hoping you're going to ask me about the fiscal cliff because that is the big problem coming ahead, guys. these programs depend on money coming from the department of labor. that is $28,000 per student here. if we go into sequestration, there's going to be trouble with that. not to mention that we're already hearing -- the association of general contractors put out a report on today's jobs report.

they're already saying over half of the construction companies that they've surveyed are redoing their plans for next year. they are already laying off workers. some of them have delayed construction projects and that's going to be a big problem if we go over the cliff. >> thank you, diana olick. meantime, call it 5,000 shades of green. random house had its holiday party on wednesday night and the ceo promised all employees a $5,000 bonus to celebrate a profitable year thanks to publishing "50 shades of grey" by e.l. james. the cheering went on for minutes. this book has topped "the new york times" paper back best-seller list for 37 weeks. ebooks have been best sellers for even longer. >> i think that deserves a little round of applause from random house. whatever happened to the holiday bonus? >> apparently the holiday party is back. it might be a potluck party, maybe just drinks in the office but the holiday party is back and that is a good sign. on deck -- you got to pick

one stock -- apple, google or microsoft. which one of those three should be pick? and could the fiscal spliff save us from the fiscal cliff. why the big money in marijuana could be the perfect solution to all of our problems. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen.

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>> as always, we have a lot of competition out there. but with our focus on making the very best products, many times we find ourselves in a league by ourselves. as tim cook singles out his competition by name, by tech horse should be you back if you had to pick just one of these stocks -- google, microsoft or apple? joining us now, the analyst an evercore partners and an analyst at barclays capital. ron, to you first. which one is it. >> for me it is easy.

i would buy apple. i just think apple is the best position. they own hardware through software through services and i think their vertical integration across all of that is really their corps strength. >> no matter how much this stock rises or even falls, rob, it is almost impossible to find an analyst that does not like apple. can this stock do absolutely no wrong? >> well, the stock's been doing lots of wrong recently. so there are ebbs and flows in sentiment. right now people are starting to worry that maybe things just can't get any better for apple. but i think these are the kind of opportunities you have to take advantage of. i'm not saying apple's always going to be perfect but when i look at how they're executing, how they are still coming out with i believe the best products and again ownership of that whole hardware through software chain, i just think they continue to be the best positioned company. >> anthony, you beg to differ a bit. you would prefer google. make the case, sir. >> well, i think that apple is a

company that goes through plod cycles and so, therefore, you've got lumpiness and risk there with each product cycle. as you have other hardware manufacturers like google and like amazon come in and they have other businesses that they could use to fund their kind of break-even foray into hardware, it is going to become more about the software. clearly apple has a formidable platform in itunes but we think longer term google is the winner in terms of its android os, powering cream which we think is the best browser, gmail, the core search product. youtube. this is google's goal, to tie a lasso around its ecosystem of advertising supported products. those revenues for me as an analyst are more predictable and also higher margin. i'd prefer to buy google ten times out of ten. >> microsoft's sitting in the corner right now feeling really lonely and left out. why not microsoft? >> i think longer term,

microsoft, windows and win 8 have received lukewarm reviews. in terms of shipments of operating systems, i think it starts with the operating system to power apps. andro android, as you guys well know in the third quarter had a 75% market share over smartphone shipments. we think android is continuing to take share of tablet shipments. for google the challenge is to continue to attack the higher and higher end of android products and then also lower tack for them, something investors ask us about. what they really need is for android users to become power users driving greater number of clicks and higher margin advertising dollars. >> rob, the only thing probably uglier than the gop democrat argument on capitol hill is the fight between samsung and apple in the courts. if they can get that resolved, what is that going to mean for apple? >> well, i don't know. personally i don't think it is the be all, end all anyway.

i do think samsung clearly has been successful as really the company that's taken android and make it work in the market. to me the sort of hurdle that samsung still faces though is while it is obviously an awesome hardware company, it is not their software platform. they're just not the software company so you need both samsung and google to work. there's no other company again that is executing on both at the same time. i think the risk is higher when you have to execute on all the above but when you can do it, i think that's the better model. >> rob and anthony, thank you and enjoy your weekend. coming up next, grab a pen. a hot list of stom picck picks. the government says yes to putting black boxes in cars. could that doom your insurance claim? and it's friday trivia time, folks. here you go -- which s&p 500 company invented the ryan flight

recorder, aka the black box? lockheed, general dynamics, microsoft, trust us, the answer will surprise you.

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here is the -- look at the answer. there it is. general mills. moving on. can you believe it? general mills actually invented the black box flight recorder. they used to do submarines and all kinds of crazy stuff in addition to all their cereal brands. kind of cool. though there's some australian guy, seriously, from melbourne who created a similar type of advice but this is an american show, general mills wins. god bless america. why are we talking about black boxes anyway? well, the white house has given the green light to put them in cars. new cars. and it is raising serious privacy concerns. phil lebeau, this is a really, really big issue. kind of feels like big brother

in the car seat with you. right? >> reporter: well, i can understand that, but think about this. most vehicles already have a black box, if you will, in the vehicle. this was at the heart of the toyota recalls a few years ago. almost all manufacturers here in the united states have some sort of device which is recording the final few seconds before an accident, before a major incident. it's not like it is constantly going. it is triggered by certain events. and so i understand people's concerns about privacy but the fact of the matter is this is already in most of our vehicles. >> does it also make it safer? does it make these cars safer essentially if you can gather that information and it helps them make better safer cars in the future? maybe it is a good thing. >> reporter: in theory, yes. obviously the automakers do study these when there have been accidents. toyota looked at a number of these black boxes. remember right after all of this happened there were people saying, hey, my prius was out of control. they went back and they looked at all the information and they

fond that it was driver error. not that the vehicle was out of control. and so that's why they had these boxes in there. if there is a defect, they'll be able to determine that. >> you got insurance companies now saying put this device in your car and you'll get a discount. why? because they know when you're speeding, they know all these things about you. what is this going to do with insurance? that's got to throw insurance -- you are -- insurance companies will never pay for anything again. you went three miles an hour over the speed limit. >> reporter: listen, i think that we already see some of that going on, brian. whether or not we're going to see that increase to a certain extent, probably. i mean there are already people who are saying, my car got dinged when it was in a parking lot when in fact you were the person driving that car around you dinged it. so there is an element of that fraud, if you will, that is going to be stripped out of the system. >> that's a good point. getting out and saying i wasn't even near my car. why is it upside down in the ditch?

except mandy will now be shown driving backwards down the turnpike the wrong way. >> i've driven on the wrong side of the road. let's send it over to bertha coombs for a quick "market flash." >> u.s. airway shares flying just a bit higher hoar on reports from the "wall street journal" that the company extended an offer to amr for a merger citing unnamed sourcing saying it would give the parent company of american airlines a 70% stake, would value the total company if they merged at over $8 billion. this takes on more meaning today, guys, because amr's american airlines pilots just ratified their contract. back to you. >> interesting stuff. thank you for that. meantime, next -- the dangers of mixing stocks and social media. and put this in your pipe and smoke it. could pot be the answer to all of our problems? we'll debate it. nt to improve our schools... ... what should we invest in? maybe new buildings? what about updated equipment?

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tgif. what are palo alto networks doing today? >> the stock dropped more overnight. revenue went up but gross margins and expenses slank. expenses roegse, gross margins

shrank. reality is this, they're growing very rapidly. sales are higher. but their cost to manage that growth are rising as well so the margin is doing this. investors don't like. >> ameron is tanking today by nearly 20%. >> here's the thing. company came out and said we're going to hire a sales force to independently launch a cholesterol lowering fish oil pill. you would think that would be good news. except investors were largely hoping they'd sell themselves to a bigger company so this move is seen as a sign they're going to go it alone, they're not going to sell themselves. crow the ceo said we're still in negotiations with bigger pharmaceutical companies. smith & wesson. this stock -- can kwee find a stock that's higher? this one is also falling even as sales and margins were up. >> if you want a good news

story, stocks wrup more than 200 percent over the past year. falling even as sales and margins rose? they boosted their forecast. >> what gives? >> the forecast boost was not enough of a boost to make investors happy. >> in other words, we want more. >> yeah. >> we're a nation of pessimists. >> this is a gun company. good news not good enough. focus media? >> where is herb? he's in his red and white striped shirt with glasses and a cane in a crowd of people that look almost exactly like him. move on. focus media is a private equity story. giant firm jumped out of the bidding. stocks down. th let's focus more. deckers is obviously the maker of uggs or distributor of uggs. what's going on with that stock today? >> it is up a little bit. about 2% here. street account which is a wire

service attributing this to renewed takeover speculation that came from the blog seeking alf. one guy writes something, it is picked up by the wire service. this had -- the reason i bring it up here is not to highlight a rumor but the point is that this is, as you know, one of the latest rumors with deckers. there's rumors all over the place on this company. it is down 57% over the past year. be careful, folks. easy for anybody to write anything and get it picked up. maybe it is true. just be careful. >> meantime, you got yours? >> i do. grab a pen. our next guest has a hot list portfolio that is really smoking. it is up more than 15% year to date and it has jumped 161% since its debut nearly ten years ago. john reese, the ceo validea capital management. they model their portfolios after the models used by guys like warren buffett and peter lynch. >> glad to be back. >> you brought in a couple names for us as well.

is your performance sort of an aggregation of these guys? you say we have the buffett portfolio, the lunch portfolio? >> the hot list is based on a consensus strategy combining several of the gurus. >> what is on the hot list? >> unwft things on the hot list is main street capital corporation. we have something here that's liked by the lynch model for its fast growth but not too fast growth. excellent returns and the fact it also has a nice little 6% dividend. >> i'm a little surprised to see western digital on that given that the world is moving away from the solid state drives and they had the problems in thailand with the flood. how did this get on the guru list? >> exactly. one of the things that frequently happens that the gurus identify is you have strong companies with strong fundamentals, leaders in its industry, that the industry appears as if it is going

downhill. more times than not, that's the perception there. the gurus pick up on that and buy it after the stock has been very heavily beat up. >> they go against the herd. >> exactly. >> this is "street signs." it is not trading the globe. one of your other picks is a russian based oil company. >> lukoil. here we have $138 billion firm that controls 17% of russia's crude. basically that's also liked by the slow grow version of the lynch model. it is growing fast but the price-to-earnings ratio is very, very low. it creates a great performance, very high cash flow -- >> and expanding rapidly on the retail gas prices in the united states. >> very much so. >> final pick, ross stores. we know the growth story. i'm surprised that it made your buffett model. i wouldn't think ross stores -- no offense to them -- would make the warren buffett model. seems a little riskier. >> that's very interesting. in particular what buffett really wants to see is nice, steady increasing earnings.

not just over a shoort period o time but a full decade. they've increased their earnings except for one dip in the middle over a full ten-year period of time. between then and where it is selling at, that's why it is of interest to have buffett mod. >> all of these are stocks you would choose in a rainy environment, a sunshine environment, they're going to weather it out? >> for right now they absolutely are. i absolute hold these in my personal and client portfolios as well. >> main street capital, western digital, lukoil and ross stores. you're on the record. we're going to list the stocks that have made it out of the middle market and into the big leagues. and what should and shouldn't companies post on social media? the man who's posted things he probably shouldn't have himself. you know what i'm talking about, howard. r ] this is joe woods' first day of work. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up

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so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real. geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please? i'm bill griffeth. coming up on "closing bell," we're finding ways to protect your money, maybe even make some, ahead of the fiscal cliff. although the official word from speaker boehner today is still no progress, there are still winners to be found on wall street. we'll name some names. plus, former vermont governor howard dean joins us to

explain why he says going over the cliff may be the best thing for our economy right now. it's all coming up, mandy drury is with me today. we'll see you at the top of the hour for the "closing bell." >> i will be with you indeed. as part of our series on "the mighty middle market," we're going to take a look at companies that have broken into the big leagues this year. our data team compiled a list of the s&p 500 firms that were in the middle market, but as of this year, have annual revenues above $1 billion. making them no longer obviously in the middle markets. we've got them on a great graphic hib me on the screen. big fpharma, alexion, vertex behind me. regeneron as well. all the way from one up to ten. brian sullivan. >> mandy, thank you. well, netflix feeling the

heat from regulators over a facebook posting by the ceo, reed hastings. julia boorstin is in l.a. live and in person, not on facebook, with more. >> reporter: well, brian, the s.e.c. is looking into whether netflix ceo reed hastings violated fair disclosure rules. back on july 3rd, hastings posted on facebook telling his 200,000-plus followers that netflix viewing topped 1 billion hours in june. that's his post right there. now, check out this july 3rd chart. the stock gained about 4% before his post. about 2% after before the markets closed early for the july 4th holiday. but on july 5th, netflix flew 13% higher. they say this pop was due to hastings disclosurdisclosure. hastings knows that the stock started to gain before his post on a positive citigroup report that gave netflix $130 price target. s.e.c.'s final verdict on this is sure to set a very important

precedent for how companies communicate not just on facebook but also on twitter an linkedin. brian? >> all right, julia boorstin, thank you very much. as more ceos find themselves in hot water, it also begs the question as to whether the laws have not kept up with social media. let's ask howard linz, for his ideas on this. do you think maybe we need to sort of come up with date and get up to -- i'm sorry. i was trying to say are we not keeping up with the times in terms of social media usage? >> she was prepping for the fiscal spliff segment. forgive her. i think the real issue is how far behind the banks are. 90% of america is being told to pump their money into etfs and index funds, yet we're so worried about reed hastings being on netflix, meanwhile,

none of america owns stocks anyan anymore, they blindly put it into etfs. put commissions back to 25 cents or 50 cents a spread and remember that these are tools. i want ceos that i invest in to talk. these are now sales tools. they're not just promotional and potentially front running tools or fair disclosure tools. fd is a done term, it's done, it's over. i want ceos who mow how to use these tools for sales and marketing. hey, i'm in chicago today, i got 12 minutes on my schedule, let's do some business. that doesn't mean the ceo is going to miss his numbers. everybody's going to read stuff into that but the point is reed ea swashbuckler. he know he'll get in hot water by doing this. it is not the first time he's done it. maybe he could be smarter about it but the real issue is wall street has to get out from behind these walls and in reality how mainstream america is now investing. we don't care about nickels and dimes. >> how many people do you have on stock tweets now, howard?

>> there's hundreds of thousands. too many. >> here's the irony. somebody could post on stock twits, hundreds of thousands of people, or even facebook, that may be a violation of the s.e.c. but if you tell a reporter to a paper that has 25,000 readers, it's not. >> again, commonsense. >> you're talking about the s.e.c., howard. >> who cares about the s.e.c. in they're not commonsense thinking either. the point is to break these rules -- someone needs to break these rules in order to get change. angellist is writing a start-up angellist but on the weekend over in washington trying to get the crowd funding bill. it is going to take stuff like this to get someone like me or a younger howard or a younger brian -- better looking brian over to washington and say these rules are out of david with how people invest right now. i want reed on facebook because that's where his employees are, that's where his small investors who buy etfs are, they want to talk to the guy. the whole thing is silly. these tools are here for a

lifetime. there's more at risk of penny stock promoters on e-mail than there is reed hoffman -- or reed hastings moving his stock on facebook. >> he's also preparing for the fiscal spliff segment as well. >> and i don't follow reed on facebook because a lot of us aren't on facebook. at least 200,000 people -- or 90% of them are scam. let's be realistic about the numbers. a lot of spam on these networks. we need commonsense rules. the s.e.c. needs some young guns, we need to invest some money and realize how people invest. people invest in etfs. >> wouldn't you say that in terms of trying to define what is material the lines are a little bit blurred, right? receipt hastings said that saying 1 billion hours of viewing in june was not material to investors. other people would big to differ. >> listen 1 billion, 1 trillion,

these are silly numbers. what really matters is, is it material. i'm not going to get into the fine drawings of the law. i don't know if it is material. wouldn't have made me buy or sell the stock. >> speaking of stocks, we're running out of time but we had a segment earlieearlier, gun to h apple, microsoft or google. which one would you buy? >> you have to buy apple or google and you short microsoft. >> you got to pick one name! >> you take my grandmother's money and you short microsoft. the surface is the dumbest product ever created. heads should roll. >> one pick would be to short microsoft. because it is one. trying to gets that through everybody's head. >> surface is a caboodle. a goner. a terrible idea. >> caboodle. >> really, tell us what you really think, howard. don't mince your words. >> why is brian -- why am i sharing with brian. i like you. you and i should have a show.

>> we're going to prepare for that fiscal splipf. >> just watch what happens after this break, howard. watch this, you'll see something. i have to go. and he's not lying. >> she's out! >> prepare for the "closing bell." >> is that the excuse you're using? look what howard linz did. got mandy booted off the show. we're going to light up the fiscal spliff next. i've been a superintendent for 30 some years at many different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved.

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all right. well, that's our question. what percent of households who reported income above $200,000 in 2009 also reported income

below 500. in other words, they were wealthy, they made more than 200, but they made less than $500,000. the answer, right around 73%. so that's the working wealthy. it's not bill gates, pokes. it's professional families, probably with student loan debt. three out of four of those families that are "rich" also making under 500, are the ones going out making the income, not inheriting it from grandma. all right. washington state, the first state in the country where it is legal to smoke pot just for fun. but a little more complicated than it sounds, unfortunately. cnbc's jane wells talking dos and don'ts. >> assuming the feds don't come in and just shut everything down like they're thinking of doing, here's the money concern. can the state price legal taxed marijuana to be competitive with tax-free illegal pot on the street? as people celebrate in seattle, even though smoking anything in public is still against the law there, the market will have to figure out if the cost of

complying with regulation and taxes in a legal pot world is more or less than the security cost criminals factor into their pricing for running an illegal enterprise. washington state says it'll take a year to set up its pol pot bureaucracy. it estimates tax revenues from marijuana will grow to $560,000 in 2013 to almost ten times that amount in 2015. it's even analyzed pricing, quote, medical marijuana dispensary prices on average range between $10 and $15 per gram with some proceed yum products exceeding $15 per gram. producer price is $3 per gram. the processer price is $6 per gram. no price elasticity is assumed. that may be a bad assumption. in colorado, the governor has yet to sign the pot law voters passed there. democratic congressman told us before the election they have to figure out what this means in terms of whether the military might come in or how they're going to do this whole thing between the feds and the state. since the election, he's

co-sponsored a bill in congress to ban the federal government from interfering with state laws on marijuana. the bill has bipartisan support. there are pot-related stocks, guys. the biggest is med box, which makes pot vendsing machines. market cap of $300 million. look what happened after the election. the stock is up over 1,000% since going up in august. take that, facebook. >> well said, jane. thank you very much. all right. so could legalizing marijuana help dig us out of our financial hole? let us bring in the executive director of the national organization for the reform of marijuana laws, known better has normal. any input into the financial benefits of the impact of tax revenue and the benefit of simply putting fewer people into jail for carrying a dime bag of pot around. >> of course. in the united states 850,000 people a year are arrested for marijuana. that's about 100,000 people in jail. the windfall savings from not

having to arrest, prosecute, imprison, and pee test these individuals, the savings runs into the $10 billion to $15 billion according to the economist at harvard university. of course, the tax revenue, whether it's from the licenses or the sales tax in the state of washington alone, they're look at $540 million to $600 million. >> $540 million to $600 million a year. this is terrifying, allen. in 1966, cops arrested two people per hour for possession of marijuana. they now arrest 87 people per hour nationwide for pot. if they go to jail, it's probably going to cost the taxpayer $60,000 a year. it seems insane. >> it is, and that's probably why more than 50% of americans now according to gallup polling support legalization. of course, the best indication, the votes in washington and colorado. both came in at 54%.

>> yeah, and very quickly, any estimate on how much tax revenue we could bring in nationally, state-wise? >> probably between $40 billion and $50 billion. that's after the prohibition prices go down to pennies on the pound. >> there you go. got to leave it there. thank you very much. >> thank you. >> short break, we're back after this. ♪ [ male announcer ] 'tis the season to discover the kid in all of us. enjoy free shipping and great values on your holiday shopping from l.l. bean. enjoy free shipping and great values if we want to improve our schools... ... what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers

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